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The Group's market diversification strategy has paid off well in FY2008. The Group's revenue in FY2008 rose 36.9% compared to that of FY2007, reaching a record high of RMB766.7 million. Gross profit of the Group grew 60.0% to RMB173.6 million and net profit increased by 23.0% to RMB44.9 million. Following the successful penetration of our pressure vessels and heat exchangers into the international market, the Group has also secured direct-export orders for our pipe supports, heat pipes and energy-recovering systems from countries such as Russia, Turkmenistan and Pakistan. Furthermore, we have also made our foray into the solar-energy sector.

To reflect our market leadership in the high-end pressure vessels and heat exchangers market, revenue from our Pressure Vessels and Heat Exchangers segment continued to lead the Group's growth, with an increase in contribution by 79.9% in FY2008 to RMB485.2 million. To highlight a few milestone projects secured during the year: firstly, we have successfully delivered a 580-ton pressure vessel to our customer in Thailand, establishing Sunpower as one of the few players in the world with capabilities to manufacture such large-sized pressure vessels; secondly, we have also successfully completed a series of pressure vessel projects worth over RMB170 million to a leading polysilicon manufacturer in China, thereby paving our way into the solar-energy sector; thirdly, we have secured a RMB94.3 million project with Sinopec and Wuhuan Engineering Corporation in the beginning of the year to deliver special-material pressure vessels as we gradually adjust our product mix to manufacture high-end products that are required by our key customers.

Our Heat Pipes and Heat-pipe Exchangers segment has performed equally well, with a 15.3% growth in revenue to RMB187.8 million in FY2008. While consolidating our leading position in the PRC market, our products have successfully entered the international market including the export of heat pipes to Russia. In FY2008, we have also supplied our proprietary waste-heat recovering systems, which are developed based on our core heat-pipe technology, to PRC and Korea. The combined value of our heat pipes and waste-heat recovering systems projects totalled approximately RMB100 million. We believe that our progress in this respect has won us higher brand awareness in the energy-recovery sector.

Our Pipe Supports segment grew by 69.7% to RMB54.9 million in FY2008 as we secured our first export sales to Germany and became a qualified supplier of UHDE. Adding on to our series of innovations, we have successfully developed the PIR (“Polyisocyanurate”) low-temperature heat-insulation support systems and entered the industrial heat-insulation systems' market in FY2008.

Our Flare-Gas Recovering Systems, which are used to recover useful petrochemical by-products contained in flare gas, have also made headways in the markets of Central Asia.

On the R&D front, the Group has also made marked progress. Firstly, in FY2008, Sunpower was approved by the PRC Ministry of Human Resources and Social Security to establish post-doctorate research programmes specialising in the research of high-efficiency heat-transfer technology; secondly, we also obtained approval from the provincial government of Jiangsu to establish an Energy-Saving Equipment & Technology Centre; and thirdly, we were also approved by the National Technical Committee to draft heat pipes and high-efficiency pipe products that are of national standards. We believe that our R&D achievements thus far have not only demonstrated our commitment towards environmental protection and technological innovation, but have also laid a solid foundation for us to propel Sunpower forward and ahead of our competitors.

The global financial crisis has adversely affected the global economy. Most industries, including the oil and gas, petrochemical, chemical and steel, were affected. As such, we foresee that our business would inevitably be impacted in the coming year as our customers are mainly from those industries.

In fact, in FY2008, the global economic downturn has already taken a toll on some of our customers. In response to this, we have temporarily suspended certain projects and took the prudent approach of increasing the provision for doubtful debts by RMB 21.1 million.

Nevertheless, we believe that we have every reason to remain optimistic of the future outlook of Sunpower.

To deal with the global economic downturn, governments over the world have put in place stimulus packages to bolster the economy. Particularly for China, the PRC government has announced its RMB4 trillion stimulus package to support the domestic economy, and of which RMB800 billion would be earmarked for investment and development plans for the energy-saving related sectors. Tied closely to these sectors, we believe that the stimulus packages would positively impact our business, both domestically and internationally.

Over the years, we have built a strong brand name recognised by industry leaders, and have established an entrenched position in the PRC market well-known for our superior technological capabilities in the areas of energy-saving and energy-efficiency. As we continue to diversify our business and replicate our success in new markets, we are confident of securing more orders.

With a current order-book on hand of approximately RMB750 million as at end 2008, and barring unforeseen circumstances, we expect a majority of our projects to be delivered in FY2009. As such, we remain optimistic of the outlook of the Group and are confident of ensuring Sunpower's profitability in FY2009.

On behalf of the board, I would like to take this opportunity to thank our esteemed customers, suppliers, shareholders and business partners, for giving Sunpower their continuous support and faith. In addition, we would like to extend our gratitude to the management team and staff for their dedication and contribution. Last but not least, I would also like to personally thank the Board for its relentless guidance to Sunpower in the past years.

Professor Guo Hong Xin
Executive Chairman